One of the common misconceptions around rewarded advertisements is that they tend to cannibalize developers’ In-App Purchase (IAP) revenue. The truth is, not only do rewarded ads NOT cannibalize IAP revenue—they actually help increase it. And we have the case study to prove it.

Our partner Idle Games recently conducted an A/B test to determine the impact of rewarded ads on in-app payments and total revenue in their app Fresh Deck Poker. As the results showed, users who were given the option of engaging with Tapjoy ads drove 11% higher in-app payment revenue and 14% higher total revenue! If anything, Tapjoy can be thought of as a gateway to in-app purchases.

The case study also reveals that if a player engaged with Tapjoy before making an IAP, they became 4.3 times more likely to make a purchase than the general Fresh Deck Poker population. That’s because Tapjoy helps introduce players to the value of premium currency and upgrades, and helps get them hooked so that they become more likely to make direct purchases.

Not only that, but Tapjoy also helped drive deeper engagement and retention within the game as well. Players who took part in Tapjoy ads retained 2.2 times longer than non offer-takers, and played six times as many days as non-Tapjoy players.

Before the test, Idle Games would only show Tapjoy ads to users after they had played for at least 21 days, and only then to non-paying users, for fear that Tapjoy would cannibalize IAP revenue. But after the test, the company began showing Tapjoy ads right away to their entire population, with full confidence that they added to—rather than subtracting from—in-app purchase.

Click on the link or image below to read the case study in its entirety.